Reuters Money

Big banks want your big bucks, but you have other options

Big banks just don’t want to sweat the small stuff.

Despite receiving some $4.7 trillion in taxpayer bailout funds, the largest of them are moving more towards wealthy customers with assets to invest and away from low-margin checking accounts. That doesn’t mean you should invest with them, though.

The banks side of things is that that want well-heeled wealth management or brokerage clients, not people who are writing small checks to pay bills. For instance, Bank of America, which recently announced a $5-a-month debit-card fee, said about two weeks later that it was planning to nearly double the number of “Financial Solutions Advisors” for its mass affluent clients.

The growing array of banking fees — common at most big banks now — are a red herring for bankers’ larger agenda of generating more income from advisory and brokerage accounts, as brokerage accounts have the potential to generate hefty commissions and advisory fees.

I suspect that BoA, which recently fell to the second-largest bank by assets, would rather get more customers into its Merrill Edge account. BoA is offering $100 plus up to 30 commission-free online trades to sign up. Just deposit at least $10,000 in cash or securities in their Merrill cash management account first.

What if you have some serious retirement or discretionary money to invest? Are big banks giving you more bang for your investment buck? As you shop for new investments, keep in mind that big banks may continue to raise fees and charge high commissions.

Here are some key questions to ask your bankers if they want your business:

5 reasons why banks hate Elizabeth Warren

Elizabeth Warren, it’s not you they hate. It’s what you represent. You want to be an honest cop when so many before you in Washington have looked the other way and pretended that the banking industry could police itself.

I can’t think of a better reason why this presidential adviser shouldn’t be the new chief of an unfettered Consumer Financial Protection Bureau.

She knows where the bodies are buried — in countless toxic forms and statements that only bank lawyers fully understand. She’ll make every attempt to end the silent rip-offs and myriad shenanigans that cost consumers billions.

As the debate about Warren — and what she stands for — rages on, here’s a look at why the banks despise the idea of her as a strong regulator:

Weak consumer regulation was the norm, but banks love the status quo Prior to the Dodd-Frank financial reform law, which established the consumer bureau, there simply was no real consumer watchdog over banks. The Comptroller of the Currency, Federal Reserve and state regulators wrote rules, but rarely enforced them in a meaningful way to consumers. The CFPB will be the first regulator in American history that didn’t answer to the banks, but to their customers. It will be a true watchdog.

Mortgage abuses were rampant More than three years after the biggest financial meltdown since 1929, we’re still trying to unravel what the banks did to foul up the global financial system. Did the banks fudge mortgage documents simply to grease the way to securitizing loans? Did they trigger foreclosures even when homeowners were paying their bills? Did they push people into bad loans they knew they would default on? If any or all of these things were true, it certainly wasn’t because the banks were over-regulated. Somebody fell asleep on their watch in Washington like Rip Van Winkle. A consumer financial bureau would keep an eye on an industry that’s operated in darkness for too long.

Credit abuses are rampant Take a look at your credit card disclosure statement. Do you have any idea how much you will owe if you’re late or lose your job and can’t pay? This is not a mystery to the banks, who have conceived elaborate formulas for charging you more money for credit.

Consumers warned about bank fees

Consumers can’t get straight answers from banks about fees that are lurking at every turn, according to a April 12 report by the national advocacy group U.S. PIRG.

A survey of 392 banks and credit unions in 21 states found that fewer than 40 percent provided upon request a document required in the Truth in Savings Act that is supposed give consumers easy access to fee information. That number grew a bit when multiple requests were made. About 45 percent of the banks either provided no information at all or a combination of wrong or incomplete documentation, U.S. PIRG said.

What should be on a bank’s fee schedule include:

• monthly account service fees
• fees to open or close accounts
• fees related to using ATMs
• fees for processing special transactions including stopping payment on a check, bouncing a check or sending processed checks that would otherwise have been held by the bank

U.S. PIRG said the banks often pointed consumers to their websites to get the information. But what the survey found was that while some basic information was available, the required fee schedules were at best difficult to find and quite often buried in a pop-ups filled with legalese.

“Some banks required consumers to take other complex steps before fee schedules even became available on the web,” the report said. “For example, one required the consumer to first read an electronic disclosure disclaimer agreement; one required a consumer to drill-down into the ‘open an account today’ menu before allowing the consumer to generate a fee schedule.”

The group allowed that not every bank was a poor performer. U.S. Bank, SunTrust and Bank of the West were noted for providing “simple easy-to-find online pages with lists of fee schedules for the states where they do business.”